Retroactive Medicaid coverage in jeopardy, could hurt providers

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More states may soon be able to opt out of providing retroactive Medicaid coverage, a trend that could put more cost burden on providers, according to some observers.

The Centers for Medicare & Medicaid Services' recent approval of a Medicaid waiver for Iowa would let the state choose to forgo retroactive coverage — which covers medical bills acquired for the three months prior to a beneficiary's application — for most enrollees.

In total, the Iowa waiver is expected to reduce Medicaid spending by $36.8 million and cut enrollment by 3,344 beneficiaries per month.

Iowa's approval may mean more states seek the waiver to “save some money and ... reduce the scope of their Medicaid program,” Barbara Eyman, of Eyman Associates, told Bloomberg BNA for a story published Monday.

Retroactive eligibility is especially valuable for long-term care residents who require care but may not be able to complete the enrollment process due to nursing home admission, Jessica Schubel, an analyst with Center on Budget and Policy Priorities, told Bloomberg.

The waiver and future ones like it could also harm long-term care providers, who could shoulder extra costs or go uncompensated for care.

“The patient has already received the care and then the question is just whether the taxpayers are going to have to pay for it,” Michael Cannon, director of health policy studies at the Cato Institute, told Bloomberg. “So the biggest advocates of these [three-month] periods are the providers.”